In October, the Company opened a new production facility in Hohhot, Inner Mongolia. This new facility added 8,000 metric tons of production capacity per year. Yongye expects the new facility to reach an annual average utilization rate of 60% for 2009. The new facility brings the Company's total production capacity to 10,000 metric tons per year.
"China's government recently announced that land reform will take place through which farmers will be allowed to sell or trade their land rights. We expect this reform to lead to larger and better managed farms, which should increase demand for our products," said Mr. Wu. "China's government also recently announced a major economic stimulus program that includes rural development. Details of what will take place are not yet available, but should have the effect of raising rural incomes and increasing demand for higher quality food products."
We look forward to utilizing our new increased production capacity to meet growing demand for our products. We plan to continue growing by deepening the penetration of our distribution and sales network, and eventually broadening our geographic market coverage. We also plan to increase our ability to provide technical assistance to our customers and help them achieve the best possible results through use of our products," stated Mr. Wu. "As part of the private placement financing that took place in April 2008, we entered into a 'make good' agreement that set a target of a minimum of $10.3 million in net income for fiscal year 2008. I am pleased to report that we have exceeded our make good target as of the third quarter of 2008. We expect to achieve 2009 make good targets of $44 million in revenue and $15.2 million in net income."
The Company will host a conference call at 08:00 a.m. Eastern time on
Thursday, November 13, 2008 to discuss its third quarter 2008 resul
|SOURCE Yongye Biotechnology International, Inc.|
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